Pertamina Looks to Kazakhstan In an Effort to Increase Production
Jakarta Globe & ID/Retno Ayuningtyas
Pertamina, Indonesia’s state oil and gas company, is exploring opportunities to acquire oil and gas blocks in Central Asia as it looks to increase production and meet demand for energy back home.
Karen Setyawan, CEO of Pertamina, said on Thursday that the company was looking at an upstream business opportunity in Kazakhstan.
Upstream typically involves oil and gas production, while the downstream business is refining the fuel into a product that can be sold.
“We would like to have an additional 100,000 bpd from that business in Kazakhstan,” Karen said on Thursday. She added that Pertamina had identified three potential assets in that country but did not identify the companies.
Two years ago, the Jakarta-based company was preparing a bid of about $3.5 billion to buy a 25 percent stake in ExxonMobil’s deep-water project off the cost of Angola. The bid did not go through.
Karen said Pertamina would form a working committee with Kazakhstan’s state company, Kazmunaigaz.
Kazakhstan, with a population of 17 million, has forecast oil production to reach 2.5 million bpd in the next five years, from its current rate of 1.25 million, according to Karen.
Pertamina, which hired HSBC, Barclays Capital and Citigroup as financial advisers this year, plans to sell as much as $2 billion in global bonds this year.
Karen said last month that proceeds from the debt sale would be used to finance the company’s business plans.
Pertamina has set aside about Rp 52 trillion ($5.6 billion) for capital expenditures this year, after setting aside Rp 40 trillion last year.
Indonesia has been trying to boost oil production to one million barrels per day since leaving OPEC in 2008.
It set its oil production target at 930,000 bpd in the proposed state budget this year. The nation’s oil output reached 903,400 bpd last year, less than the 945,000 bpd target in the state budget.
Oil production hit a peak of 1.6 million bpd in 1995 as part of the so-called oil bonanza era. Reserves at many Indonesian oil fields are declining and aging equipment has made operations less efficient.